Murray v. UBS Securities, LLC
601 U.S. 23 (2024)
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Rule of Law:
Under the Sarbanes-Oxley Act's whistleblower protection provision (18 U. S. C. § 1514A), an employee alleging retaliation must prove their protected activity was a "contributing factor" in the unfavorable personnel action, but is not required to also prove the employer acted with "retaliatory intent" or animus.
Facts:
- In 2011, Trevor Murray was employed by UBS as a research strategist, a role requiring him to certify to customers that his reports on the firm's securities business were independently produced and reflected his own views.
- Leaders of UBS's commercial mortgage-backed securities (CMBS) trading desk improperly pressured Murray to skew his reports to be more supportive of their business strategies.
- Murray reported this conduct to his direct supervisor, Michael Schumacher, in December 2011 and again in January 2012, asserting that it was "unethical" and "illegal."
- Schumacher expressed sympathy but emphasized to Murray the importance of not alienating the trading desk and advised him to "write what the business line wanted."
- Shortly after this exchange, and despite having given Murray a strong performance review just months earlier, Schumacher emailed his own supervisor recommending Murray be removed from UBS's headcount or transferred to a desk analyst position without SEC certification responsibilities.
- The trading desk declined to accept Murray as a transfer, and UBS terminated his employment in February 2012.
Procedural Posture:
- Trevor Murray filed a whistleblower complaint with the Department of Labor, alleging his termination violated § 1514A of Sarbanes-Oxley.
- When the Department of Labor did not issue a final decision within 180 days, Murray filed an action in federal District Court.
- In the District Court, UBS moved for judgment as a matter of law, arguing Murray failed to produce evidence of Schumacher's retaliatory animus; the District Court denied this motion.
- The District Court instructed the jury that Murray needed to prove his protected activity was a "contributing factor" in his termination, but was not required to prove it was the primary motivating factor or that UBS's articulated reason was a pretext.
- The jury found that Murray had established his § 1514A claim and that UBS failed to prove it would have fired him absent the protected activity.
- UBS again moved for judgment as a matter of law, which the District Court denied, adopting the jury's advisory verdict on damages.
- UBS appealed the decision to the U.S. Court of Appeals for the Second Circuit (UBS as appellant, Murray as appellee).
- The Second Circuit vacated the jury's verdict and remanded for a new trial, holding that "retaliatory intent" is an element of a § 1514A claim and the trial court erred by not instructing the jury on Murray's burden to prove it.
- The Supreme Court granted certiorari to resolve a circuit split on this issue.
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Issue:
Does a whistleblower bringing a claim under the Sarbanes-Oxley Act's anti-retaliation provision, 18 U. S. C. § 1514A, need to prove that their employer acted with "retaliatory intent" in addition to demonstrating that their protected activity was a "contributing factor" in the adverse employment action?
Opinions:
Majority - Justice Sotomayor
No, a whistleblower invoking 18 U. S. C. § 1514A does not need to prove that their employer acted with "retaliatory intent" beyond showing their protected activity was a "contributing factor" in the adverse employment action. The Court found that Section 1514A(a)'s text does not explicitly include a "retaliatory intent" requirement. The term "discriminate," as used in the statute's catchall provision ("discharge, demote, suspend, threaten, harass, or in any other manner discriminate"), means "differential treatment," as established in Babb v. Wilkie and Bostock v. Clayton County, and does not inherently require animus or ill will. An employer can discriminate without malicious intent, for example, by believing an employee might be "happier" in a different role. The only intent required by the statute is the intent to take an adverse employment action "because of" the protected whistleblowing activity. Furthermore, requiring proof of retaliatory animus would undermine the statute's mandatory burden-shifting framework, which is designed to be plaintiff-friendly. This framework, incorporated from the Whistleblower Protection Act of 1989, only requires a plaintiff to show their protected activity was a "contributing factor" (a broad standard) to the adverse action. Once this initial showing is made, the burden shifts to the employer to prove, by clear and convincing evidence, that it "would have taken the same unfavorable personnel action in the absence of" the protected activity. This mechanism is intended to uncover the "elusive factual question of intentional discrimination" without imposing an "excessively heavy burden" on the plaintiff. Congress deliberately chose this standard to ensure that whistleblowing is never a factor in adverse personnel actions, and the Court cannot override this policy choice by affording employers more protection than the statute provides.
Concurring - Justice Alito
Yes, the plaintiff must still show intent to discriminate, but not "animus" or "ill will." Justice Alito agreed that proving "animus" (defined as prejudice or ill will) is not required because the statute makes no mention of it. However, he emphasized that a plaintiff must still prove that the employer "intentionally treats a person worse because of" the protected conduct, citing Bostock v. Clayton County. This means a discriminatory discharge made "because of" a factor necessarily involves an intentional choice where that factor plays some role in the employer's thinking. The burden-shifting framework serves as the mechanism for demonstrating this discriminatory intent. Under this framework, the plaintiff must show that the protected conduct was a "contributing factor" (meaning it helped to cause or bring about) in the employer's decision. If the plaintiff makes this showing, the intent requirement is met, and the burden then shifts to the employer to prove "by clear and convincing evidence" that the same unfavorable personnel action would have been taken regardless of the protected conduct, thereby addressing causation.
Analysis:
This decision significantly lowers the evidentiary bar for whistleblowers seeking protection under Sarbanes-Oxley, making it easier for them to establish a prima facie case of retaliation. By definitively rejecting an independent "retaliatory intent" requirement beyond the broad "contributing factor" standard, the Supreme Court reinforces the plaintiff-friendly nature of the statute's burden-shifting framework. This outcome is likely to encourage more whistleblowing, as employees will feel more secure that merely showing their protected activity played any role in an adverse employment action will shift the burden to the employer to justify its decision. Consequently, employers will face a heightened imperative to meticulously document legitimate, non-retaliatory reasons for personnel decisions to satisfy the "clear and convincing evidence" standard for their affirmative defense, impacting corporate compliance and risk management strategies.
